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The half-a-dozen companies that lined up for US-based data analytics provider Digital Risk late last year were awed by the presence of executives from Bain Capital, the private equity major, in the discussions. The Bain folks were not standing for themselves. They were standing in for Genpact, the $1.9 billion Indian BPO major in which Bain bought 30% in August 2012.

Digital went to MphasiS, but message was subtle: Boston-based Bain is steering Genpact from the back seat, in ways big and small. "When we meet Genpact now, we don't see Genpact, but Bain," says the head of a rival BPO, on the condition of anonymity. "Bain is like the 'big power' behind Genpact." When asked about this, NV 'Tiger' Tyagarajan, CEO of Genpact, is measured with his words. "The Genpact M&A leader leads any acquisition effort, though the Bain team can also come along," he adds.

Increasingly, Bain is going along for Genpact meetings, setting up introductions with other companies in its portfolio for possible client wins, sitting down with the Indian company's managers, and more. Led by Amit Chandra, the head of its Indian operations, Bain has four directors on the 10-member Genpact board. They engage with Genpact executives on many matters, as part of a plan to double the company's revenues to $4 billion in about five years.

Bain's hands-on approach is a contrast to that of Genpact's previous owners: two other PE firms, Oak Hill and General Atlantic Partners. At $67 billion, Bain manages thrice the assets than the other two put together. And it's a lot more involved in Genpact. "Bain has five people on Genpact, while the previous investors had none," says a business head at Genpact, not wanting to be named. "Chandra is the lead guy. Others are those who sit on the boards of other Bain portfolio companies."

But control can be a delicate issue, more so when it was from the back seat. "I would hate to be the CEO of a company where Bain is -- they interfere with the management and try to run it," says the rival BPO head quoted earlier. Even as he plays down the larger-than-life and control-obsessed impressions of Bain, Tyagarajan says the PE firm is a huge ally in the path chosen by Genpact before it changed hands: one where it morphs from a BPO to an integrated player that provides BPO services as well as IT prowess, and one where it uses acquisitions to drive growth.

"Bain Capital is global," says Tyagarajan. "When we go to Japan, Bain is there. And it is there when we go to Lat Am. The Bain network is larger than the network of our previous PE investors and we use it to bag business." Adds Raman Roy, chairman and managing director of Quatrro BPO Solutions, who was part of the team that set up Genpact in its original avatar: "With Bain, Genpact will achieve in two to three years what it would have achieved otherwise in five to six years."

First Innings

On a video call from New York, Tyagarajan in tow, Chandra draws on a sports analogy to highlight the BPO potential. "We are in the middle of the first innings of Genpact," says Chandra, managing director, Bain Capital India. "I'm not talking about cricket, but baseball, which has nine innings. BPO, today, is where IT services was a decade back. The scale up begins now and we see plenty of headroom for growth."

In its own way, Genpact, India's largest BPO firm, has been through many innings even before Bain came along. It started life as the back-office of US conglomerate GE in 1997, before being spun off—and renamed—as Genpact in 2005. GE ceded control to Oak Hill and General Atlantic Partners in 2005, who did the same to Bain in 2012.

Chandra says Bain has invested in Genpact with an investment horizon of "five to 10 years". If Chandra is betting on Bain to do better, that thinking stems from his reading of the BPO industry and what Bain can do for Genpact.

According to Bangalore-based consulting firm Zinnov, BPO was a $164 billion market in 2012. Indian firms did about $16 billion of this work and grew at 12%. Chandra says only a quarter of Fortune 500 companies have done some degree of offshoring of business services—moving work to low-cost locations like India, China and The Philippines. He sees more of them migrating, a process that takes more time in BPO contracts than IT ones. "In IT, you essentially outsource a project for three to nine months," says Chandra. "In BPO, it is a long-tail contract. It makes people think very hard."

But when they do make the shift, Chandra feels, it will be in favour of big players like Genpact. "The top four or five players have grown at the expense of others because clients are very clear: they want to work with fewer people and go with companies that have much deeper expertise in their verticals."

The deeper expertise means doing a lot more than just basic call centre and processing work—for example, data analytics and financial risk modelling. According to Zinnov, about 15% of the $164 billion BPO spend takes place in high-end business services, where Genpact has been steadily beefing up its capabilities and revenue contribution.

The Bain Way

Chandra is convinced Bain can add value to Genpact in many ways. "We try to help management teams connect the dots. Genpact is no different," he says. "We have invested in the best team in the business. We think there are a lot of interesting choices this team can make, which is what we are doing."

Chandra describes Bain's style as "consultative". "Our DNA is out of a consulting company," he says. Adds Tyagarajan: "Bain

brings strategic thinking capability—telling us what might be good for growth. For example, we want to do a lot of data analytics work, where Bain has visibility on how companies are using data analytics to grow in existing and new markets."

Bain, typically, buys companies that are among the top three or four in their respective industry, and then tries to accelerate growth in them. Genpact is not its first BPO asset. Its current portfolio of 64 companies includes Atento, Latin America's largest call centre, and Japan's Bellsystem24.

In India, besides Genpact, Bain is currently invested in Hero Investments and Himadri Chemicals. Sundararaman Viswanathan, manager, consulting, Zinnov says Bain is a hands-on PE player that does three things: "First, how it can engineer the balance sheet for a better valuation. Second, it puts consultants in place to improve efficiencies. Third, it uses its portfolio of companies and network to help boardroom connects to get more business."

Bain could do for Genpact what Blackstone, a fellow PE player, did for Mumbai-based Intelenet: made its portfolio companies to ship work to Intelenet, helped grow the BPO and sold it for a 60% point-to-point return in four years.

Unlike Intelenet, Genpact is not in need of a resuscitation -- it has 600 clients. And it has carved out an identity that goes far beyond GE, which remains its biggest client, accounting for one-fourth of Genpact's revenues. "Even if you take out the GE business, in the last eight years, we have created $1.4 billion from zero—by far more than any other BPO has done," says Tyagarajan.

Yet, increasing the revenue momentum will require aggressive client and business addition. Bain's portfolio of 64 companies has a combined turnover of about $120 billion. These include Domino's Pizza Japan, SunGard, NXP Semiconductors, Toys "R" Us and Hospital Corporation of America.

"We are exposing our portfolio companies to Genpact," says Chandra. "Then, they take their own decisions." According to Tyagarajan, before Bain invested, Genpact had two Bain portfolio companies as clients; in the last six months, it has added two more from that set.

Partha Iyengar of Gartner doesn't think this way of adding clients is a game-changer for a market leader like Genpact. "For a startup, boardroom connects can help move the needle," says the vice-president, research. "But at Genpact's size, they should not need a PE player to open doors for them to bag a customer. The focus of the PE to accelerate growth should be on acquisitions."

Genpact 2.0: IT + BPO

Since Bain came on board, Genpact has made one acquisition. In February, it bought Jawood, a US-based company that provides consulting and technology services to health insurers. Tyagarajan is eyeing more, provided they are strategic to Genpact, well run, add revenue muscle and are a cultural match. "It could be in healthcare, life sciences, pharma, insurance or commercial lending," he says.

Acquisitions have been integral to Genpact's evolution from a large, standalone BPO to an IT-BPO combine of some strength. Acquisitions like Jawood and Headstrong, the latter for $550 million in 2011, point to a more IT-centric growth strategy. In 2010, 87% of Genpact's revenues came from BPO and the rest from IT services. In 2012, the mix changed to 77:23.

Going forward, the BPO could add more IT assets to Genpact. "Standalone BPO is relevant if you are small," says Iyengar of Gartner. "When you have built scale, that model can be a limitation. We see Genpact relying more on IT for future growth."

In a world where the lines between IT and BPO companies are blurring, Genpact is on a strong wicket, says the BPO head of one of the top five IT services companies, not wanting to be named. "BPO companies understand IT better, rather than the other way around," he says. "Within IT services companies, BPO was always looked as a step-child, though it is changing now."

IT services can also help Genpact improve profit margins: net margin for a top BPO is about 16%, against 22-25% for IT services. "We would like to keep margins for the medium term at the current profile," says Tyagarajan. "When you are in a growth industry, it's wrong from an investor, client and company perspective not to invest in that growth. That's the path we have been on. This ensures we have ammunition for growth rather than focus on increasing margins."

Be it growth or margins or acquisitions there are more people, in Genpact and in Bain, applying their heads on such matters. "Bain tries to run the company," says the head of the BPO rival quoted earlier. "Unless they create a buy in for their strategy, there could be senior-level attrition." Things are good for now, but this is just, as Chandra says, the first inning of a nine-inning grind.